Bitcoin’s value dropped below US$26,300 during Asian trading on Monday morning. Ether prices also fell and stayed lower than US$1,600 throughout the day. Every single one of the top 10 cryptocurrencies that was not a stablecoin fell in value. Over the course of the previous day and a half, Toncoin had the most percentage decline, falling by over 4%. The bear market in cryptocurrencies started after the Federal Reserve of the United States adopted a more hawkish policy stance at its meeting in September. The Federal Reserve has indicated that there will be another increase in interest rates before the end of the year and that rates will remain higher for a longer period of time than was originally anticipated. During the early morning trade in Asia, U.S. stock futures had a positive trend. On Friday, the three major U.S. indexes finished with losses, making this week a losing one overall.
Bitcoin is below US$26,300; more declines are expected.
According to data provided by CoinMarketCap, the price of one bitcoin declined by 1.22% in the past 24 hours, bringing it down to US$26,252.57 as of 7:40 a.m. in Hong Kong. The weekly loss for the cryptocurrency with the most market capitalization in the world was 0.91%. Over the course of the weekend, it maintained a position of just around $26,500, but on Monday morning, it broke below the support line.
“Overall, the trend is down and stays bearish,” Markus Thielen, head of research and strategy at digital asset service platform Matrixport, stated in a report that was published on Monday.
Due to the fact that Bitcoin was unable to break above its 50-day moving average of US$26,876, further downward volatility is anticipated.
If Bitcoin continues to trade for less than US$26,000, the market may try to make another break to the downside, according to Thielen.
Ether fell 0.86 percent to US$1,579.12, marking a weekly loss of 2.52 percent in value. The second-most valuable cryptocurrency in the world broke below the key support level of $1,600 U.S. dollars for the first time since Thursday.
“The inability of Ethereum to rally above US$1,650 is of the utmost concern as a break lower could have major implications for the sentiment surrounding alternative cryptocurrencies,” Thielen continued.
The Ethereum Cancun update, more commonly referred to as EIP-4844, is a proposed update to the Ethereum network that has the goals of increasing both the speed of the network and its cost-effectiveness.
According to blockchain intelligence company Santiment, the average fee for a transaction on the Ethereum blockchain reached its lowest level since December 2022 on Saturday, when it plummeted to approximately $1.15 US dollars.
“Based on past observations, we have noticed that the value of ETH begins to increase when it is easier and cheaper to use. In a tweet on Twitter that was published on Saturday, Santiment made the following statement: “Increased utility may then lead to recovering market cap levels.”
All of the other top 10 cryptocurrencies that are not stablecoins have experienced losses during the past day. Toncoin was the worst-performing cryptocurrency, plunging 4.22% to US$2.20 and experiencing a weekly loss of 3.98%. Despite this, the Open Network’s native token, known as TONNE, still managed to achieve a monthly gain of more than fifty percent.
During the previous twenty-four hours, the entire market value of cryptocurrencies fell by 1% to $1.04 trillion, while the trading volume increased by 8.42% to reach $17.64 billion.
Ahead of the Fed meeting, equity traders in the United States were “overly optimistic.”
As of 9:50 in the morning local time in Hong Kong, futures contracts on U.S. stocks were trading higher. Friday was a negative day for trading on Wall Street, with the Dow Jones Industrial Average leading the pack of declining indices with a loss of 0.31%.
The week ended with a loss for all three of the major U.S. indices. Both the S&P 500 and the Nasdaq recorded their worst weekly losses since March, with the S&P 500 falling by 2.93% and the Nasdaq falling by 3.62%, respectively.
On Thursday morning, most of the main market indices in Asia were in the red. Each of China’s Shanghai Composite, Hong Kong’s Hang Seng, and South Korea’s Kospi experienced a decline in value. The Hang Seng was the market that lost the most ground, falling 0.99%, while the Nikkei of Japan gained 0.61%.
Investors are currently processing the Federal Reserve’s hawkish monetary policy forecast. On Wednesday, the Federal Reserve decided not to adjust its target range for the federal funds rate, which currently sits between 5.25% and 5.50%, but it did revise its economic outlook to indicate that there will be one more increase in the target range before the end of 2023. In addition, it forecasts a slower-than-expected reduction in interest rates all the way through 2024.
These investors have “wanted to trade peak interest rates for almost an entire year now.” However, both Jerome Powell’s speech and the Fed’s prediction demonstrated that the central bank “doesn’t think we’re there yet,” said Hill. The fact that Powell is the Fed’s chair demonstrated this.
After the Fed’s remarks, the yield on the 10-year U.S. Treasury note settled at 4.44% on Friday, after briefly going above 4.5% on Thursday for the first time since 2007. This marked the first time that this has occurred since 2007.
Fed governor Michelle Bowman stated on Friday that the most recent consumer price index (CPI) suggested a rise in inflation, which she used as an example to explain the central bank’s hawkish attitude. This coincides with an increase in the price of oil. According to Bowman, the persistent threat of rising energy prices might “reverse some of the progress” that has been made on inflation in recent months. She warned this risk could “reverse some of the progress” if it materialises.
As of 10:30 in the morning local time in Hong Kong, the benchmark for the price of oil, Brent futures, was trading at approximately $92 USD. In the preceding 30 days, that constitutes a rise of over 11%. On Thursday, Morgan Stanley increased its projection for Brent prices for the fourth quarter from US$82.5 per barrel to US$95 per barrel. The American financial behemoth claimed in a paper that Reuters had access to that a price over $100 USD would appear “stretched.”
The Federal Reserve will have a meeting on November 1 to discuss the upcoming decision regarding interest rates. The CME FedWatch Tool currently forecasts a 74.6% possibility that there will not be an increase in interest rates in November, which is an increase from the previous prediction of 73.8% on Friday. In addition, it indicates that there is a 59.3% likelihood of another stoppage in December, which is an increase from the 54.8% possibility on Friday.
In other news, the rating agency S&P downgraded its prediction for economic growth in China in 2023 from 5.2% to 4.8% on Monday. It pointed to the restricted fiscal and monetary easing policies of the government as factors in the fall in the economy.
